IslamicFinance.de

Khalid Alsweilem, a former senior official at Saudi Arabia's central bank says he believes the kingdom may soon change the way it manages its oil wealth as part of efforts to protect its financial reserves in an era of cheap crude. The Saudi Arabian Monetary Agency ( SAMA ) manages the vast bulk of petrodollars earned by the world's top oil exporting country; net foreign assets at the central bank totalled $664.5 billion in June. Alsweilem, who managed the assets as chief investment officer at SAMA , argues the arrangement is dangerous because the finance ministry can draw freely on the reserves when it wants to cover budget deficits caused by periods of low oil prices.

A number of Saudi insurance firms have been loss-making for years because of severe competition in the market, where large companies with capital of some SR1 billion ($267 million) dominate small firms capitalized at around SR200-SR400 million, which find it hard to compete. That's why Saudi Arabian Monetary Agency (SAMA) would welcome mergers among local insurance companies as long as they were positive for all parties, said Governor Fahad Al-Mubarak. He said SAMA was working hard with the managements of insurance firms to study their internal situations and develop restructuring plans so they could return to profitability.

The Saudi Arabian Monetary Agency (Sama) has announced plans to launch a real estate refinancing company with SR5bn ($1.3bn) of capital to help develop the kingdom's mortgage market. The company will be launched through the government's Public Investment Fund (PIF) or its subsidiaries, said Sama governor, Fahad al-Mubara.

Saudi Arabia is discussing with banks the possibility to launch a riyal-denominated Islamic bond, or sukuk as the kingdom abandons its aversion to sovereign-level debt to help build a local currency yield curve.
Talks are ongoing between the Saudi Arabian Monetary Agency and local and international banks with operations in the kingdom, with an issue forseen in the first quarter of next year. The sukuk will be marketed by a governmental agency or a state fund.

In the oppinion of Saleh Bin Abdullah Kamel, the head of the Council of Saudi Chambers of Commerce, the best way to overcome unemployment in the Muslim World is in the application of Islamic economics and Zakat.
Sheikh Kamel stressed in a speech during the first session of the last day of the Jeddah Economic Forum 2011 that the Saudi Arabian Monetary Agency should expedite setting up Shariah supervisory boards to regulate the work of banks.

The approval of the mortgage law was proposed to be delayed because a surge in inflation to nearly six per cent in October. The proposal was made by the Saudi Arabian Monetary Agency (SAMA), the Gulf Kingdom's central bank.
The study by the Saudi American Bank Group (SAMBA) showed consumer lending by the country's 12 commercial banks picked up in the first half of 2010, rising by almost 10 per cent over the corresponding period of 2009.

The appointment of Muhammad Al-Jasser last month as the new governor of the Saudi Arabian Monetary Agency (SAMA). Foreign regulatory officials and bankers expect a much more proactive policy approach from the new governor. Others expect SAMA under Al-Jasser to open up to Islamic banking in particular and to show leadership in this field in the light of the growing globalization of the industry.